Fuji Television Network Inc. will consider selling off its stake in Livedoor Co. and seeking compensation for the valuation loss on the shareholdings, which were estimated at about 9.76 billion yen as of Monday, sources said.
Fuji TV's move came as Livedoor President Takafumi Horie and three executives were arrested in the evening on suspicion of securities law violations.
The broadcaster earlier spent 44 billion yen to purchase 133.74 million shares, or 12.75 percent of Livedoor's total outstanding shares, after the two firms settled their takeover battle over Nippon Broadcasting System Inc. At the time, Fuji TV paid 329 yen per Livedoor share but the stock closed Monday at 256 yen.
Although the agreement signed by the two firms requires Fuji TV to hold its Livedoor shares until the end of September 2007, Fuji does not have to honor it in case of illegal conduct by Livedoor, a Fuji TV official said.
The official went on to say it will be natural to seek compensation for the stock loss if it becomes clear that Livedoor negotiated the deal while concealing important facts about its operations.
In any event, Fuji will likely find it difficult to get rid of the shares in the open market.
Still, company officials say that a Livedoor share could be worth 200 yen or slightly less considering that several investment funds are interested in buying the stock because Livedoor has little debt and presides over wide-ranging businesses including mail-order and used-car sales.